Assignment Games With Stable Core
Assignment Games With Stable Core
999
20019
Key words: assignment game, stable core, large core, exact game
1. Introduction
Assignment games (Shapley and Shubik, 1972) are models of two-sided match-
ing markets with transferable utilities where the aim of each player on one side is
to form a pro®table coalition with a player on the other side. Since only such
bilateral cooperations are worthy, these games are completely de®ned by the
matrix containing the cooperative worths of all possible pairings of players from
the two sides.
Shapley and Shubik (1972) showed that the core of an assignment game is
precisely the set of dual optimal solutions to the assignment optimization prob-
lem on the underlying matrix of mixed-pair pro®ts. This result not only implies
* The authors thank the referees for their comments and suggestions.
178 T. Solymosi, T. E. S. Raghavan
that all assigment games have non-empty core but also that the core can be
determined without explicitly generating the entire coalitional function of the
game. The algorithm of Solymosi and Raghavan (1994) demonstrates that for
assignment games the nucleolus can also be directly computed from the data
i
that induces the game. The bargaining set M1 (Aumann and Maschler, 1964;
Davis and Maschler, 1967) is another solution which is completely known and
easily computable for assignment games, since for these games it coincides with
the core (Solymosi, 1999).
The stable set, the classical solution suggested by von Neumann and Mor-
genstern (1944), need not exist for all TU-games (Lucas, 1968). Besides, it need
not be unique. Indeed, if a game has a stable set then it typically has a multitude
of stable sets. On the other hand, there are classes of special games on which the
stable set exists and is unique. Perhaps the best known such class is that of
convex games for which Shapley (1971) proved that the core is the unique stable
set.
The main purpose of this paper is to identify those assignment games whose
core is stable, hence it is the unique stable set. Since assignment games induced
by diagonal matrices are convex (cf. Theorem 3), there are such games. A sec-
ondary goal is to give the characterization in terms of properties of the under-
lying matrix so that its veri®cation does not require the explicit knowledge of
the entire coalitional function. We achieve both goals by proving that the core
of an assignment game is stable if and only if the entries in an optimal assign-
ment for the grand coalition are row and column maximums in the underlying
matrix (Theorem 1). In other words, to have core-stability it is necessary and
su½cient that there is a matching between the two types of players in which
each player is paired with whom his/her pro®tability is the highest. This implies
that assignment games with a di¨erent number of players on the two sides
cannot have a stable core. It remains an open problem whether or not all as-
signment games have a stable set.
Several su½cient conditions for stability of the core have been discussed in
the literature. Convexity of the game (Shapley, 1971) is a well-known one. Sub-
convexity of the game and largeness of the core were introduced by Sharkey
(1982) who showed that convexity implies subconvexity; subconvexity implies
largeness of the core; which in turn implies stableness of the core. In an un-
published paper Kikuta and Shapley (1986) investigated another condition,
baptized to extendability of the game in (Gellekom et al., 1999), and proved that
it is necessary for core-largeness and still su½cient for core-stability. A uni®ed
proof of all these relations was given by Gellekom et al. (1999). Their valid
counter-examples demonstrate that these conditions are indeed all di¨erent.
Shapley (1971) proved that in a convex game, for each coalition there is
a core allocation which gives exactly its worth to the coalition. This condi-
tion, baptized to exactness of the game in (Schmeidler, 1972), typically neither
implies nor is implied by core-stability (Biswas et al., 1999; Gellekom et al.,
1999). On the other hand, for totally balanced games, exactness is implied by
largeness of the core (Sharkey, 1982) and even by extendability (Biswas et al.,
1999). It follows from the results of Biswas et al. (1999 and 2000) that for totally
balanced symmetric games and for totally balanced games with no more than
four players, core-largeness, extendability, exactness, and core-stability are all
equivalent conditions.
We provide matrix characterizations also for these su½cient conditions
(Theorem 2 and Theorem 3). It turns out that on the class of assignment games,
Assignment games with stable core 179
largeness of the core, extendability and exactness of the game are all equivalent
conditions, but are strictly stronger than stability of the core. Convexity and
subconvexity are also equivalent, and are strictly stronger than all the other
conditions.
C P; V fx A R P : e P; x 0; e S; x a 0 ES H Pg;
i.e., the core is the set of allocations which yield nonpositive excess for all
coalitions.
We say that allocation y dominates allocation x via coalition S if y SaV S
and yk > xk Ek A S. Note that an allocation can be dominated only via co-
alitions having positive excess at that allocation. The (nonempty) core C of a
game is called stable if for every imputation x A InC there exists a core allo-
cation y A C and a coalition S such that y dominates x via S.
Given two ®nite sets S and T, we call m J S T an S; T-assignment, if
it is a bijection from some S 0 J S to some T 0 J T such that jS 0 j jT 0 j
min jSj; jTj. Trivially, m q if S q or T q. We shall write i; j A m
as well as m i j. We denote by P S; T the set of all S; T-assignments.
Obviously, P S; T fqg if S q or T q.
A game P; V is called an assignment game if there exists a partition P
I W J, I X J q, of the player set and a nonnegative matrix A aij i A I ; j A J
such that
X
V S VA S : max aij ES J P:
mAP SXI ; SXJ
i; j A m
the players with the row/column indices. So we shall use N f1; 2; . . . ; ng for
the set of indices, while I f1; 2; . . . ; ng and J f1 0 ; 2 0 ; . . . ; n 0 g for the set of
row and column players, respectively. In other words, we put a prime ( 0 ) on the
index j to distinguish the j-th column player j 0 A J from the j-th row player
j A I . Coalitions of the type fi; j 0 g are called mixed-pair coalitions.
Throughout the paper we assume that the rows and columns of the under-
lying matrix A are arranged suchP that the diagonal assignment f i; i : i A Ng is
n
maximal in A, i.e., VA I W J i1 aii .
To emphasize the bipartite nature of assignment games, we shall write the
payo¨ allocations as u; v A R n R n . Let us introduce the notation
eij u; v : aij ui vj i; j A N
We say that a matrix A has dominant diagonal if all of its diagonal entries are
row and column maximums, i.e., aii b aij and aii b aji for all i; j A N. Note that
A has dominant diagonal if and only if in the assignment game VA the special
imputations
u; v : ui 0; vi aii : i A N u; v : ui aii ; vi 0 : i A N 1
(i) C VA is stable;
(ii) A has dominant diagonal.
positive, S contains at least one column player, say the j-th one. Then vj0 >
vj ajj , a contradiction to vj0 a ajj that holds in any core allocation u 0 ; v 0 .
We get that u; v A C VA . Interchanging the roles of rows and columns and
repeating the above argument with the other special imputation u; v, we sim-
ilarly get that u; v A C VA . It follows that A has dominant diagonal.
ii ) i Let u; v A I VA nC VA . We show that if A has dominant diag-
onal then there exists u 0 ; v 0 A C VA such that u 0 ; v 0 dominates u; v via some
coalition S. Actually, we show domination via a mixed-pair coalition.
vi vj b eij ; uj ui b eij : 2
It follows from the telescopic nature of these inequalities that for any two
nodes s and t in G u; v,
182 T. Solymosi, T. E. S. Raghavan
1
e : minfepq ; minfvj0 : vj0 > 0gg:
2
Clearly, e > 0. De®ne u 00 ; v 00 by
for all i A N.
We claim that u 00 ; v 00 is in the core. Since u 0 ; v 0 A C, we obviously have
ui00 b 0, vi00 b 0 and ui00 vi00 aii for all i A N. It remains to check that
ui00 vj00 b aij for all i 0 j. When both vi0 and vj0 are positive or when both are
zero, we have ui00 vj00 ui0 vj0 b aij . If vi0 > 0 and vj0 0 then ui00 vj00
ui0 e vj0 b aij e > aij . On the other hand, if vi0 0 and vj0 > 0 then ui00 :
ui0 aii and ui00 vj00 ui0 vj0 e > aii b aij . Thus, u 00 ; v 00 is indeed a core
allocation.
Finally, we show that u 00 ; v 00 dominates u; v via the mixed-pair coalition
f p; q 0 g. Firstly, since epq > 0, (2) implies vp > vq b 0, so vp0 vp > 0. Then
dp 0 gives up00 up0 e up dp e > up . Secondly, it follows from dq epq
that vq0 vq dq > 0. Then e a 12 epq gives vq00 vq0 e b vq 12 epq > vq .
Thirdly, by de®nitions, up00 vq00 up0 vq0 up vq epq apq . Thus, u 00 ; v 00 A
C indeed dominates u; v via the mixed-pair coalition f p; q 0 g.
Assignment games with stable core 183
(i) C VA is large;
(ii) VA is extendable;
(iii) VA is exact;
(iv) A has dominant and doubly dominant diagonal.
Proof: i ) ii It holds for any TU-game, see (Kikuta and Shapley, 1986) or
the proof of Proposition 1 in (Biswas et al., 1999).
ii ) iii It is straightforward to establish for totally balanced games, see
the proof of Proposition 2 in (Biswas et al., 1999).
iii ) iv Let VA be exact.
Take the coalition J of all column players. Then there is a u; v A C VA
such that u; v J v J VA J 0, thus vj 0 for all j A J. It follows that
ui aii for every row player i, i.e., u; v u; v. Thus, the core contains one
of the special imputations in (1). The mirror argument gives that the core con-
tains the other special imputation in (1). Therefore, the underlying matrix A has
dominant diagonal.
As we remarked above, when we check that our matrix A has a doubly
dominant diagonal we can assume without loss of generality that i 0 j and
i 0 k. Take coalition f j; k 0 g. Then there is a u; v A C VA such that uj vk
ajk . Adding it to ui vi aii and using coalitional rationality of u; v give
aii ajk ui vk uj vi b aik aji . Thus, A has doubly dominant diagonal.
iv ) i Let A have dominant and doubly dominant diagonal.
Take an allocation u 00 ; v 00 that is coalitionally rational in VA . Then ui00 b 0,
vj00 b 0 and eij00 : eij u 00 ; v 00 a 0 for all i; j A N. Let us de®ne u 0 ; v 0 by ui0 :
ui00 minfui00 ; minj eij00 g and vi0 : vi00 for all i A N. Clearly, u 0 ; v 0 is coali-
184 T. Solymosi, T. E. S. Raghavan
tionally rational, and u0i a ui00 for all i A N. Moreover, for each row player i,
either ui0 0 or minj eij0 0, where eij0 : eij u 0 ; v 0 . Now, let us decrease
the payo¨ of each column player as much as possible without loosing coali-
tional rationality, i.e., let us de®ne allocation u; v by ui : ui0 and vi : vi0
minfvi0 ; minj eij0 g for all i A N. As before, u; v is coalitionally rational,
vi a vi0 for all i A N, moreover, for each column player i 0 , either vi 0 or
minj eij 0.
We claim that this u; v is a core allocation. Since it is coalitionally rational,
we are done in case eii 0 for all i A N. Suppose eii < 0 for some i A N. Then at
least one of ui and vi is positive, because A is nonnegative. Let us suppose that
ui 0. Then for column player i 0 , vi > 0 and eii < 0, so there is a row player
j 0 i such that eji 0, i.e., uj vi aji . Subtracting this from ui vi > aii gives
0 b uj > aii aji , a contradiction to A having dominant diagonal. We obtain
that if eii < 0 for some i A N then both ui and vi are positive. Then however,
there must be indices j 0 i and k 0 i such that eji 0 and eik 0. Since u; v is
coalitionally rational, ejk a 0. It follows that eii ejk < 0 eik eji , a contra-
diction to A having doubly dominant diagonal. Therefore, we must have eii 0
for all i A N, so u; v is indeed a core allocation that is componentwise less
than or equal to the arbitrarily chosen coalitionally rational allocation u 00 ; v 00 .
Hence, C VA is large.
(i) VA is convex;
(ii) VA is subconvex;
(iii) A is a diagonal matrix (i.e., aij 0 if i 0 j).
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